House of Representatives

Explanatory Memorandum

Circulated By the Authority of the Minister for Families, Housing, Community Services and Indigenous Affairs, the Hon Jenny Macklin MP

Schedule 5 - Clean energy payments under the

Farm Household Support Act

Summary

This Schedule provides for a lump sum clean energy advance to be paid to recipients of the exceptional circumstances relief payment under the Farm Household Support Act.

Background

As provided elsewhere in this Bill, a lump sum clean energy advance equivalent to 1.7 per cent increase in the payment will be paid from May to June 2012 to eligible social security recipients before commencement of the carbon pricing scheme.

Recipients of the exceptional circumstances relief payment under the Farm Household Support Act will also receive the clean energy advance. However, because these payments are not a qualifying social security benefit under the Social Security Act, amendments to the Farm Household Support Act provide the appropriate mechanism to allow recipients access to the advances.

The Farm Household Support Act regulates the provision of income support to qualifying recipients. Centrelink administers the payments delivered under that Act and, where applicable, its operation mirrors the provisions of the Social Security Act and the Social Security Administration Act. These amendments provide for the payment of the clean energy advance in a manner similar to the arrangements for other social security benefits, as defined in section 23 of the Social Security Act.

Explanation of the changes

Amendments to the Farm Household Support Act

Items 1 to 8 amend subsection 3(1) of the Farm Household Support Act, inserting definitions to ensure that they have the same meaning as in the Social Security Act.

Items 9 amends subsection 3(2) to insert a definition of advance qualification day, to mean the day a person qualifies for the clean energy advance, or the day on which the determination is made.

Item 10 amends subsection 3(2) to insert a definition of clean energy advance, to mean a clean energy advance as described in new section 8G, 8H or 24F of the Farm Household Support Act.

Item 11 amends subsection 3(2) to insert a definition of clean energy advance daily rate, to mean the rate as defined in new section 24D of the Farm Household Support Act.

Item 12 amends subsection 3(2) to insert a definition of clean energy advance period, to mean the period for which a person qualifies for the clean energy advance under new section 8G or new subsection 8H(1), (2) or (3).

Item 13 amends subsection 3(2) to insert a definition of number of advance days, to mean the same as in new section 24E. The number of days is the number of days in the recipient's clean energy advance period that are on or after 1 July 2012, or on or after the advance qualification day.

Item 14 amends subsection 3(2) to insert a definition of pension age, so it has the same meaning as in the Social Security Act, otherwise than when used in Part 3.14A or 3.14B of that Act in relation to a person who is a veteran, within the meaning of the Veterans' Entitlements Act.

Item 15 amends subsection 3(2) to insert a definition of youth allowance age so it has the same meaning as in Part 2.11 of the Social Security Act.

Item 16 amends subsection 3(2) to insert a definition of youth disability supplement, so it has the same meaning as in Module D of the Youth Allowance Rate Calculator in the Social Security Act.

Item 17 repeals the heading to Part 2, substituting 'Part 2 - Qualification for and payability of certain support and payments'. This provision reduces complexity within the legislation.

Item 18 inserts new Division 1C of Part 2. This new Division sets out, under new section 8G, the qualification periods for individuals not of youth allowance age, and, under new section 8H, for individuals of youth allowance age. These provisions allow the Secretary to make a determination regarding an individual's qualification for the advance.

New Division 1C also contains new section 8J, which limits the number of advances for which an individual may qualify. If an individual is not of youth allowance age, they may qualify for one advance under new section 8G. If an individual is of youth allowance age, the Secretary may determine that they qualify for one advance under new subsection 8H(1) or (2), and a second advance under new subsection 8H(3).

Item 19 inserts a note after subsection 14(1) in Part 3, stating that, where an individual is already in receipt of a specified payment, they are not required to lodge a claim to receive the clean energy advance.

Item 20 inserts new Part 4A. The provisions in the new Part determine the amount of clean energy advance payable and ensure that the calculation of rates is the same as for other social security benefits, as defined in section 23 of the Social Security Act.

Item 21 repeals the heading to Part 5, substituting 'Part 5 - Payment of certain support and payments'. This provision reduces complexity within the legislation.

Item 22 inserts a new subsection 25(4), to specify when the clean energy advance will be payable where an individual qualifies for the advance under new section 8G, 8H or 24F, and to confirm that the clean energy advance will not be payable where the Secretary is aware that a person has died.

Item 23 inserts new section 26C, to specify how the clean energy advance will be paid to an individual. A note mentions that, should a debt be identified under section 56 of the Farm Household Support Act, the amount of advance payable may be reduced for the purpose of recovering the debt.

Item 24 inserts a reference in paragraph 54(1)(c) to the clean energy advance, to authorise the Secretary to request information from an individual to support their qualification for the advance.

Item 25 repeals the heading for section 55, substituting the heading 'Certain support and payments to be inalienable'. This provision reduces complexity within the legislation.

Item 26 inserts into section 55 a reference to the clean energy advances, to ensure that these payments are not transferable, whether by way of, or in consequence of, sale, assignment, execution, charge, bankruptcy or otherwise.

Item 27 adds new subsection 56(4). This provision allows for some, or all, of the amount paid as a clean energy advance, to be recovered by the Commonwealth should an overpayment to an individual occur.

Item 28 inserts a reference to the clean energy advance in the note to section 56, to ensure that a debt due to the Commonwealth in respect of the clean energy advance may be recovered in accordance with provisions under sections 1227A and 1231A of the Social Security Act.

Item 29 inserts into subsection 57(3) a reference to the clean energy advance, to allow the clean energy advance to be paid out of the Consolidated Revenue Fund, and to be appropriated accordingly.

Amendments to the Social Security Act

Item 30 repeals the heading to section s1227A of the Social Security Act, substituting the heading 'Certain debts arising under the Farm Household Support Act'. This provision reduces complexity within the legislation.

Item 31 inserts into subsection 1227A(1A) a reference to the clean energy advance, so that a debt that is recoverable under section 56 of the Farm Household Support Act in respect of clean energy advance is also a debt that is due to, and recoverable by, the Commonwealth under the Social Security Act.

Item 32 inserts new paragraph 1227A(2)(aa), to allow for a deduction to occur from the clean energy advance, should the qualifying individual be liable to pay a debt due to the Commonwealth.

Item 33 inserts into subsection 1227A(3) a reference to the clean energy advance, to give it the same meaning as in the Farm Household Support Act, and to allow a reduction in the rate of advance to recover a debt in respect of an exceptional circumstances relief payment or farm help income support payment.

Item 34 repeals the heading to section 1231A, substituting the heading 'Deductions from debtor's farm household payments or support'.

Item 35 amends paragraph 1231A(1)(b) to provide for how a deduction is made from a clean energy advance to recover debt due to the Commonwealth under section 56 of the Farm Household Support Act.

Item 36 amends paragraph 1231A(2) to provide for the Secretary to decide the amount by which the clean energy advance is to be reduced, to recover a debt due to the Commonwealth under section 56 of the Farm Household Support Act.

Item 37 adds new subsection 1231A(5), to give the definition of clean energy advance the same meaning as in the Farm Household Support Act, and to treat a lump sum payment of the advance as a single instalment of that advance.